Glazer likely to go ahead with bid

Last updated at 11:33 29 April 2005

Malcolm Glazer looks set to plough on with his £800million bid for control of Manchester United despite failing to earn approval from the Red Devils board.

United's directors, led by chief executive David Gill, informed Glazer of their unanimous view that they could not recommend his proposals to buy the club to shareholders because it contains an 'aggressive' business plan and debt levels that could lead to a 'significant financial strain' on the company.

In delivering the strongly-worded rebuttal, United also welcomed the decision of the Takeover Panel to issue Glazer with a 'put up or shut up' notice which will force him to make a formal bid by May 17 or back off for six months.

The latest twist in what has become a long-running saga has been widely welcomed by the major fans' groups, who are implacably opposed to Glazer's involvement and believe the American's ambitious plans are about to blow up in his face.

However, they may have to gear themselves up for a few more battles yet because it is understood that rather than deter Glazer, yesterday's announcement only makes a bid more likely.

Glazer was in talks with major backers JP Morgan and NM Rothschild last night and if, as expected, the funding packages already agreed are released, the 78-year-old will be in a position to lodge a bid before the deadline.

'The 'put up or shut up' notice is long overdue'

Only at that point will the United board make their true opinions known, with supporters hoping the huge flaws identified by the club in yesterday's announcement will be enough to persuade major shareholders John Magnier and JP McManus to keep their 28.9% stake, without which Glazer cannot possibly succeed.

"The 'put up or shut up' notice is long overdue," claimed Shareholders United vice-chairman Oliver Houston.

"We have had seven months of speculation and volatility that has disrupted the club and angered so many supporters.

"Glazer's business plan is clearly unacceptable to the board, even in its amended form, and equally unacceptable to supporters, as we have long argued.

"The danger has not passed. Glazer could easily pull a rabbit out of the hat but at least now we are working to some kind of timetable and we know it is not going to drag on and on."

If Glazer goes through with his bid, the saga will drag on most of the summer though, with a 60-day deadline likely to be imposed for shareholders to inform the Tampa Bay Buccaneers owner if they are prepared to accept a 300p per share offer.

Just as they did when they launched their first attack on Glazer, the United board have admitted the sum is a 'fair' price.

That fact alone has forced Gill and his colleagues to act with a degree of caution.

Legal opinion divided

Legal opinion is divided over whether directors' sole responsibility is to their shareholders, or whether future stakeholders in a business can also be taken into account in decisions such as these.

Glazer has already made it clear he would be prepared to test the issue in court and without that threat, it is possible his entire plan would have been dismissed completely.

Instead, United have reiterated the concerns first expressed on February 11, hinting that while the debt levels - believed to be between £300million and £500million - might have been rejigged, the potential impact is still the same.

"The board remains of the view that the assumptions in the Glazer business plan are aggressive," said the official club statement.

"Furthermore the board believes that, notwithstanding the changes from the previous proposals, the proposed capital structure, taken as a whole, still contains more leverage than the board would consider prudent and that as a consequence there is likely to be significant financial strain on the business.

"Given the board's concerns about the potential impact of the proposal on the company, the board has informed Glazer that it cannot provide a recommendation to shareholders to accept any offer made on the basis of the current proposal.

"Whilst recognising that the price under Glazer's proposal is fair, the Board's unanimous view is that they could not support Glazer's proposal (were it to become a formal offer) as being in the best interests of the company."